The Curse of New Lifesaving Technologies
If you want to understand why every effort to staunch the rising cost of health care in this country is doomed to failure, then this conference was exactly the place to be.
No discussion of Medicare fraud or “managed health care” shenanigans here--just a rigorous glimpse of tomorrow’s medical technology. It’s clever, exciting, innovative and anything but cheap. This government-sponsored “International Biotechnology Conference on Applications to Medical Devices and Perspectives for Future Developments” revealed a fundamental truth that neither Congress nor the health-insurance companies have adequately grasped: There isn’t a revolution in biotechnology--there are dozens.
Each is rife with the potential to save lives and dramatically improve the quality of health. Our medical researchers, indeed, have a Midas touch; virtually every technology they tap yields intriguing health benefits. But don’t forget that the Midas touch wasn’t a blessing but a devious curse. King Midas ultimately turned his beautiful daughter into a lifeless golden statuette. Similarly, our technologists are creating magnificent breakthroughs that, like King Midas, we literally cannot afford. Their technical brilliance is evolving into an economic curse.
Health care currently consumes no less than 11% of America’s gross national product. After listening to the presentations at this conference, co-sponsored by the Food and Drug Administration, there is no way to escape the conclusion that--barring an economic cataclysm or a health epidemic--this percentage will inexorably rise.
Some of the sharpest MDs and medical technologists in the country showed off their preliminary findings in biosensors and biomaterials, monoclonal antibody diagnostics and their inevitable role in therapeutics. Molecular biology, materials science and electronics technology are irresistibly converging into new generations of medical devices. We have a tremendous stream of powerful innovations just waiting to come on line. “There are more opportunities than we can effectively pursue,” stated Ralph E. Christoffersen, vice president for research of SmithKline Beecham, one of the world’s largest pharmaceutical houses.
And the knowledge base to build new technical platforms is deepening. Rockefeller University’s Norton Zinder extolled the potential benefits of the Human Genome Initiative--the effort to map the 3-billion-plus pairings of base material that serve as the genetic instruction set for the human body. There’s no question that this massive enterprise will generate crucial insights into the nature of disease. There’s equally no doubt that this initiative will spawn a host of new technologies and treatments. It’s supposed to.
“It’s crazy to say we won’t be spending more than 11% of GNP,” says Dr. Earl Steinberg, director of Johns Hopkins University’s Program for Medical Technology and Practice Assessment. “There will continue to be an exponential rate in the increase of innovations in health-care technology.”
Unlike electronics--where the underlying technology and economies of scale promise that you will get more bang for the buck over time--history indicates that no one can confidently predict the economic impact of a new medical technology.
However, if you look at the historical portfolio of such technologies, it’s clear that they soak up money like a black hole sucks up light. For a variety of reasons, cost containment efforts--such as Diagnostic Related Groups, a government-set compensation formula for hospital procedures--by the medical care reimbursement complex have slowed but not stalled the economic impact of past technologies.
“The increased incentive for health-care providers to be cost conscious in their technology acquisitions has been counterbalanced by their need to compete in the marketplace” because hospitals and health-maintenance organizations believe they can’t afford not to offer their patients the benefits these technologies can provide, says Hopkins’ Steinberg. Would it be a good idea to reduce these competitive pressures in the health-care delivery system? I think not. On balance, competition tends to reduce costs rather than unleash them.
So let’s face facts. Even if we culled every scrap of waste out of the health-care system, the dynamics of medical innovation relentlessly push us toward higher costs. I’m not talking about ridiculously expensive innovations such as artificial hearts, but solid, middle-of-the-road manageable innovations such as implantable biosensors for diabetics and people suffering from hypertension.
If a diagnostic, device or therapeutic looks as if it’s going to have a per-case cost of hundreds of thousands of dollars, then it should have a lower priority in the regulatory queue than technologies with a per-case cost of a few thousand. I think it’s clear that we have to bias our research and development spending in medical technology away from “big-ticket” items and toward technologies that are designed to be less expensive.
It’s equally clear that our medical regulatory establishment is not prepared to cope with the waves of innovation that are about to sweep into the marketplace. The FDA is understaffed, under-resourced and, frankly, lacks both the organizational structure and the technical expertise to cope with all these new technologies that blur the traditional regulatory lines between drugs and devices. “They are overwhelmed and they know it,” asserts Gary T. Steele, a former Genentech executive who now runs Molecular Devices, a young biotechnology materials company.
“There has been an exponential growth in license applications,” says Dr. Jerome A. Donlon, associate director of the FDA’s Office of Device Evaluation in the Center for Devices and Radiological Health. He acknowledges that the FDA’s resources are expanding at a rate something less than exponential. The FDA is not an agency on the brink of collapse, but, unless it receives a boost in funding and people power, it will become an agency tumbling over the brink of decay. The odd couple of Rep. John Dingell (D-Mich.) and Sen. Orrin Hatch (R-Utah) are making a vigorous attempt to upgrade the FDA’s allocations.
Just as all these technologies are converging to create new diagnostics, devices and therapeutics, it’s time for our medical regulatory structures to converge. It’s not enough for an FDA to examine medical device and drug safety and effectiveness; and the National Institutes of Health to fund cutting-edge research in every aspect of medical science, and the Health Care Financing Administration to map out hospital reimbursement schemes. It’s time that these organizations talked to each other and to Congress and to the private health-insurance companies about what role “cost” and “price” should play in the funding of health-care technologies.
We complain a lot about the high cost of health care. I think that Americans should be prepared--and are prepared--to pay top dollar to get the best and most effective medical technologies available. But I also think that it’s time that we make a conscious effort to inject cost as a criterion before all these technologies start leaping through their regulatory hoops.
